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Tire Shortages

I have not yet seen a news article that addresses the real reason we have OTR tire shortages today. Here is a little some thing to think about instead of hiding behind soaring commodity prices and increased demand from developing countries such as China & India.

Gold Fever. A quest for the mighty dollar from mining industry and tire industry alike is to blame.

The Mining industry has been playing one tire company off against the other over the past two decades, in order to reduce operational costs, and increase profits. Tire companies, in an effort to secure the all important “Market Share,� have bowed to the mining companies every whim. We now find them in a situation where the return on investment to the tire industry has restricted the industry’s ability to expand at the rate required to meet world demands.

In a world where we are all held accountable for our actions and decisions. Who do we hold accountable? I am sure the CEO’s of these industry giants will still be circum navigating the globe in the corporate jet. Meanwhile lower ranked company officers will be chewing their fingers to the bone in an effort to provide a solution to the problem. Only to be overthrown by higher ranked officers in an effort to justify there existence, by presenting a balance sheet with the figures on the right side of the ledger to the CEO.

I find it very ironic that we now find a new commodity market trading OTR tires, where some in the Mining industry are consistently paying up to four times the amount previously paid for tires. Have we seen share prices within the Mining industry fall, due to reduced quarterly profits, or as a result of increased tire prices? Doesn’t it also seem ironic, that the commodity traders, trading these OTR giants are now showing the giants of the tire industry how to do it?

Back in 2005 the Tire Industry giants forecast supply shortages until 2007-2008. . Now mid way through 2007 the industry is saying 2011-2012. When will it end?

One thing is for sure, there is a solution to every problem. Or will they just continue to blame the Chinese?

Whilst blame and accountability does not resolve anything, or holding those accountable, spare a thought for the Chinese who was blamed for this fiasco.

Think about it.

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